Business Use vs. Commercial Use: What’s the Difference?

It’s always important to discuss the use of your vehicle with your broker to ensure you’re insured properly in the event of a claim. Remember that all material changes in risk must be reported to your insurance company. If you started your policy out using your vehicle to commute to and from work, but have recently changed occupations where you have to use your vehicle for client meetings or transporting goods, be sure to let your broker know. Failing to do so can result in the insurance company denying your claim, which nobody wants! Whether you’re using your vehicle for business or commercial use, we have a plethora of companies that can insure you based on your specific needs.

Sounds simple enough, but what’s the difference between business and commercial use? Let’s have a closer look…

Business Use

Business use includes (but is not limited to) using your vehicle in pursuit of your occupation or profession. This includes carrying items used on your job (paperwork, laptop, samples, etc…), but not supplies. Examples of a business use classification would be a lawyer driving his own car to client meetings, a realtor driving her own vehicle to home showings, etc…

Commercial Use

Commercial use includes (but is not limited to) using your vehicle to transport tools and materials to your place of employment or site, or any type of delivery. Examples of a commercial use classification would be a contractor going to her site, a florist delivering his floral arrangements, etc…

What about Contracted Ride Sharing or Food Delivery?

Insurance companies have varied requirements for Ride Sharing (such as Uber, Tap Car, etc…) and Food Delivery (such as Uber Eats, Skip The Dishes, etc…). Some companies allow you to use your vehicle for Ride Sharing or Food Delivery, providing you have a separate policy in place to cover you while your vehicle is being used for said purposes. Other companies will not cover you if you use your vehicle for these purposes—even if you’re involved in a claim while driving for personal use only (to the grocery store, gym, etc…). Be sure to review your contract with the Ride Sharing Company or Food Delivery service and always call your broker before diving into any endeavor. Making a few extra dollars is nice, but it could cost you so much more in physical damages, liabilities or injuries if you fail to report your new business venture to your insurance company—don’t risk it.

The world of insurance can be a scary place, but remember that your friendly Ravenhill broker works for you and is always ready and willing to help navigate the process. Contact us today!

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